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The loonie jumped against the US dollar on Friday after Canadian consumer prices rose in January to the highest level in more than two years.
The loonie jumped as much as 0.4 per cent against the US dollar, reversing losses of 0.1 per cent after Statistics Canada said consumer prices rose 2.1 per cent in January from a year ago —the swiftest growth since October 2014. That was ahead of economists’ expectations for a 1.6 per cent gain and higher than the 1.5 per cent rise clocked in December.
The uptick in inflation was led by gasoline prices — that posted their largest increase since September 2011 — and higher crude prices.
However, core inflation, the Bank of Canada’s preferred measure, dipped to 1.3 per cent in January, from 1.4 per cent the previous month.
“The Bank of Canada is likely to be more concerned about the softer core inflation readings,” David Madani, economist at Capital Economics, said. “All three core inflation measures were below the 2 per cent inflation target.
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